POLITICAL BUSINESS CYCLES AND FISCAL-POLICIES IN DEVELOPING-COUNTRIES

The pryer studies empirically fiscal policies around elections in 35 d eveloping countries. It finds that governments try to improve their re -election prospects with the help of expansionary fiscal policies, Ris ing fiscal deficits before elections are followed by fiscal consolidat ion afterwards. These cycles can be found particularly in countries wh ich are less trade-oriented, Certain IMF-supported programs contribute to fiscal stabilization.